Solicitor struck off after court told three clients were left €1.1m short in ‘Ponzi scheme’
A SOLICITOR who operated an informal money-lending scheme that left three of his clients €1.1m short has been struck off by the High Court for misconduct.
Brendan MacNamara was a former partner in Devitt, Doorley MacNamara, The Valley, Roscrea, Co Tipperary. He operated what was "effectively a form of Ponzi scheme" whereby he received money from clients for property purchases and used it to pay others in his "informal money-lending scheme", Sean Guerin BL for the Law Society told the court.
Joan O'Neill, a solicitor in the society's regulation department, said in an affidavit that the misconduct complaints related to liabilities over a number of conveyancing transactions which left three clients at a total loss of around €1.16m.
In one case, €270,000 was borrowed from Roscrea Credit Union and an undertaking was given by Mr MacNamara to hold in trust the title of a specific property for the credit union. However, no title was obtained and the money which had been drawn down was paid out to people who were moneylenders, Ms O'Neill said.
The second client borrowed €170,000 from Bank of Ireland to buy a property over which there was already a charge and which Mr MacNamara was aware of, Ms O'Neill said. The bank paid the money to the solicitor but good title over the property was not received.
In the third case, the solicitor received a payment of €750,000 for the intended purchase of six units in a property development, Ms O'Neill said. Only €305,000 of this was paid to the vendor and the solicitor failed to obtain good title to the property, she said.
At a Solicitors Disciplinary Tribunal hearing in July 2011 over complaints against Mr MacNamara and two other solicitors in the firm, Sheelagh Doorley and Garech Doorley, no misconduct findings were made against the Doorleys but Mr MacNamara was found guilty, censured and ordered to pay €12,000 to the Law Society's compensation fund.
However, High Court president Mr Justice Nicholas Kearns was told the society did not consider this adequate and was seeking a strike-off.
What Mr MacNamara did went beyond gross negligence and was a dereliction of duty, said Mr Guerin, for the Society.
While the three clients who were at a loss may have been "wise to the ways of the world", it did not excuse what Mr MacNamara did, Mr Guerin said.
Mr MacNamara's solicitor, Sean Sexton, asked the judge to go along with the tribunal's recommendation because a strike-off would be a draconian penalty.
Mr Justice Kearns said he took into account the strong views of the society and he believed a strike-off was adequate to meet all aspects of the case.